One of the best-ever selling business books was one by Spencer Johnson named Who Moved My Cheese? Asset managers should write a follow-up named Who Moved My Fees?

That’s because a debate is raging on the future of asset management in the UK, with traditional fee streams drying up and new ones appearing – and the lessons of the book are highly relevant.

As an example, managers are being challenged by pension schemes asking investment consultants to make fiduciary decisions on their behalf. It’s easy to see why. Fast-maturing schemes, and their sponsors, have never been so worried about making every penny count. They have never been so pestered by people trying to extract far bigger fees from them. In such circumstances, a consulting adviser is a friendly face and a convenient reference point.

The move will be given further impetus as consultants start – as Financial News reported last week – publishing performance data. The trend has started with players such as P-Solve and the big players such as Towers Watson, Mercer and Aon Hewitt will have to follow suit.

All of this is putting fee revenue from traditional asset managers under pressure. But other factors are helping the process along.

UK defined contribution payments to schemes are failing to pick up the slack. Pitmans Trustees urged greater haste last year. It has estimated that the DC funding gap in the UK amounts to $2.2 trillion. Retail investors remain reluctant to commit to savings products in the wake of the credit crisis.

Other countries are developing pension systems, as explored on page 22. But they are slow to develop and slower still to hire foreign managers and consultants.

Depressed? In despair? Just go back to Who Moved My Cheese? Johnson’s short book – less than 100 pages – was a parable that explained the bleak choice facing businesses that fail to adapt to changes.

The story concerned two mice and two little people hungry for cheese. Even before the cheese supply was running out, the mice scampered off to find more. One little person worked out he needed to search out some cheese as well. The second failed to see his life had changed for ever. He could not understand he needed to change his viewpoint. He blamed everyone else for his problems. “Who moved my cheese?” he wailed.

Where can asset managers and consultants find new cheese?

The biggest Cheddar involves managers looking after money for the wealthy and affluent where they can hope to win business on an industrial scale.

The fact is, there is no shortage of individual investors at the wealthier end of the market. Millionaires were worth $46 trillion at the start of this year, according to Royal Bank of Canada. The affluent, with $100,000 or more to invest, are worth further trillions, with savings bolstered by maturing pension savings and central bank monetary easing.

But like the characters in the book, managers are going to need to adapt. While pension funds are after solid, repeatable, returns, the new customer base is chasing star names and turbo-charged performance.

Such investors frequently access internet-driven distribution platforms capable of providing a global shop window to quality managers with the right stuff.

Disciplined asset gatherers such as Schroders and JP Morgan Investment Managers are doing really well. Boutiques with top performance and a savvy marketing strategy can perform with panache. There’s cheese and fees to be found with the right strategy.

Competition has led to a ferocious talent war, leading to escalating rewards for star managers. BlackRock has hired a string of such people, led by large cap growth manager Lawrence Kemp, to revive its active equity products based in the US. Old Mutual Global Investors is making a habit of hiring, and retaining, star managers. Some star managers like Neil Woodford are relaunching their careers. They can anticipate rich rewards beyond the dreams of avarice.

Hedge funds are seeking more money from mainstream investors, and long-only managers are using hedge fund techniques to spice up their life.

Boutique managers are starting to receive tentative bids from asset gatherers keen to get their hands on their products: “It’s the next stage of the cycle. It’s unavoidable,” said one investment banker.

Predators such as Wells Fargo, Royal Bank of Canada, Macquarie and Natixis have brands, and distribution clout, capable of boosting flows beyond the reach of any boutique.

What of the consultants – our erstwhile fiduciary managers? Robert Gardner, co-founder of consulting firm Redington, is convinced that the longer-term future for his sector is in providing advice to individuals, many of whom mistrust their banks.

Gardner says this should involve those who want wealth plus those who possess it. It can involve educating individuals and advising them on ways of developing their fortune by banking their gains.

A growing number of managers and consultants will chase this stream of business in the year ahead.

Let’s just hope there’s enough cheese to go round.

--This article first appeared in the print edition of Financial News dated December 9, 2013